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Financing

Fresenius meets its financing needs through a combination of operating cash flows generated in the business segments and short-, mid-, and long-term debt. In addition to bank loans, important financing instruments include the issuance of Senior Notes, Euro Notes, a commercial paper program, and a receivables securitization program.

In 2011, the Group’s financing activities mainly involved the refinancing of existing and maturing financing instruments and the long-term financing for acquisitions and general corporate purposes.

  • In February 2011, Fresenius Medical Care, through its subsidiaries Fresenius Medical Care US Finance, Inc. and FMC Finance VII S.A., issued unsecured Senior Notes in the principal amounts of US$650 million and €300 million, both due in 2021. The U.S. dollar bond was issued at a price of 99.06%. With a coupon of 5.75%, the yield to maturity was 5.875%. The euro senior notes were issued at par and has a coupon of 5.25%. The net proceeds were used to repay indebtedness, for acquisitions, and for general corporate purposes.
  • In March 2011, Fresenius SE & Co. KGaA once again considerably improved the terms of its 2008 credit agreement following negotiations with the lenders. As part of the admendment, the interest rate for the approximately US$1.2 billion term loan C (new: term loan D) was reduced. The new interest rate is composed of the respective money market rate (LIBOR and EURIBOR), which is subject to a 1.0% floor (formerly 1.5%) and a margin of currently 2.5% (formerly 3.0%).
  • In June 2011, Fresenius Medical Care repaid the Trust Preferred Securities issued by Fresenius Medical Care Capital Trust IV and V in the amount of US$225 million and €300 million as scheduled. The Trust Preferred Securities were repaid using existing credit lines.
  • In August 2011, the receivable securitization program of Fresenius Medical Care was extended until July 31, 2014, and upsized by US$100 million to US$800 million. In addition to the advantageous three year extension, the terms as a whole were also improved.
  • In September 2011, Fresenius Medical Care, through its subsidiaries Fresenius Medical Care US Finance II, Inc. and FMC Finance VIII S.A., placed unsecured Senior Notes in the principal amount of US$400 million and €400 million, both due in 2018. The coupon of the euro-denominated senior notes in the amount of €400 million is 6.5% and for the dollar-denominated US$400 million is also 6.5%. The net proceeds were used for acquisitions, to refinance debt, and for general corporate purposes.
  • In October 2011, Fresenius Medical Care, through its subsidiary FMC Finance VIII S.A., issued floating rate Senior Notes in the principal amount of €100 million, due in 2016. The Senior Notes were issued at par and carry interest of 3-month EURIBOR plus 350 basis points. The net proceeds were used for acquisitions, to refinance debt, and for general corporate purposes.

In 2012, the Group has financing requirements due to acquisition projects and the refinancing of indebtedness. The following chart shows the maturity profile of the Fresenius Group.

Fresenius SE & Co. KGaA has a commercial paper program under which up to €250 million in short-term notes can be issued. No commercial papers were outstanding as of December 31, 2011 and December 31, 2010.

FINANCIAL POSITION – FIVE-YEAR OVERVIEW


€ in millions 2011 2010 2009 2008 2007
1 Trade accounts receivable and inventories, less trade accounts payable and payments received on accounts
Operating cash flow 1,689 1,911 1,553 1,074 1,296
as % of sales 10.2 12.0 11.0 8.7 11.4
Working capital1 4,067 3,577 3,088 2,937 2,467
as % of sales 24.6 22.4 21.8 23.8 21.7
Investments in property, plant and equipment, net 758 733 662 736 662
Cash flow before acquisitions and dividends 931 1,178 891 338 634
as % of sales 5.6 7.4 6.3 2.7 5.6

€ in millions 2011 2010 2009 2008 2007
1 Trade accounts receivable and inventories, less trade accounts payable and payments received on accounts
Operating cash flow 1,689 1,911 1,553 1,074 1,296
as % of sales 10.2 12.0 11.0 8.7 11.4
Working capital1 4,067 3,577 3,088 2,937 2,467
as % of sales 24.6 22.4 21.8 23.8 21.7
Investments in property, plant and equipment, net 758 733 662 736 662
Cash flow before acquisitions and dividends 931 1,178 891 338 634
as % of sales 5.6 7.4 6.3 2.7 5.6

The Fresenius Group has drawn about €4.3 billion of bilateral and syndicated credit lines. In addition, the Group had approximately €2.0 billion in unused credit lines as of December 31, 2011 (including committed credit lines of €1.4 billion) available. These credit facilities are generally used for covering working capital needs and are – with the exception of the Fresenius SE & Co. KGaA 2008 credit agreement and the Fresenius Medical Care 2006 credit agreement − usually unsecured.

As of December 31, 2011, both Fresenius SE & Co. KGaA and Fresenius Medical Care AG & Co. KGaA, including all subsidiaries, complied with the covenants under all the credit agreements.

Detailed information on the Fresenius Group’s financing can be found in the Notes. Further information on financing requirements in 2012 is included in the Outlook.

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